https://www.taxtmi.com/caselaws?id=6489 For deemed dividend purposes under section 2(6A)(e) of the Indian Income-tax Act, 1922, "accumulated profits" means commercial profits, not merely assessable profits. A development rebate, although allowable as a tax deduction, was treated as an incentive allowance for new machinery and plant and not as a business cost reducing commercial profits. Merely transferring the amount to a reserve by debiting the profit and loss account did not amount to capitalisation of profits. Because the profits were not actually capitalised, the development rebate reserve retained the character of accumulated profits and could be included under the deemed dividend provision; the assessee's contention failed. en-us Tue, 21 Sep 1976 00:00:00 +0530 Thu, 13 Feb 2025 14:48:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6489 For deemed dividend purposes under section 2(6A)(e) of the Indian Income-tax Act, 1922, "accumulated profits" means commercial profits, not merely assessable profits. A development rebate, although allowable as a tax deduction, was treated as an incentive allowance for new machinery and plant and not as a business cost reducing commercial profits. Merely transferring the amount to a reserve by debiting the profit and loss account did not amount to capitalisation of profits. Because the profits were not actually capitalised, the development rebate reserve retained the character of accumulated profits and could be included under the deemed dividend provision; the assessee's contention failed. Case-Laws Income Tax Tue, 21 Sep 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6489